Punit Goenka files caveat in SC in anticipation of SEBI's appeal against SAT order

Punit Goenka SAT

Punit Goenka, the former top executive of Zee Entertainment Enterprises Limited (ZEEL) has filed a caveat in Supreme Court against the Securities Exchange Board of India (SEBI) in anticipation of appeal against Securities Appellate Tribunal (SAT) order.

A caveat is a pleading filed by a party to a litigation in the lower court, informing the court that the opposing party, who has not succeeded in the lower court may file a case against them. The court is to hear both sides before passing any order in case a caveat is filed.

On October 30, the SAT set aside SEBI order barring Goenka from holding key managerial positions in ZEEL and other companies till it completes investigation on allegations against him. SAT had noted that SEBI has a track record of not completing investigations on time.

After SAT pronounced its order, SEBI's lawyers asked the appellate tribunal to stay its own order till they approach the Supreme Court. However, SAT refused to pass any such orders.

Goenka had challenged an order by SEBI passed in August, asking its investigating officials to complete the enquiry in eight months. The order also barred ZEEL's former directors Subash Chandra and Goenka from holding key managerial positions till the investigation is over.

Why did Sebi ban Goenka and Chandra?

The market regulator alleged that the duo helped move funds out of ZEEL and routed them back to the company through layered and circuitous transactions. They did so by “falsely portraying that ZEEL had received the dues from associate entities”, it said.

Sebi had alleged that Chandra and Goenka had "abused their positions" for personal financial gains. It noted that the Mumbai-based media house had faked the recovery of loans to cover for private financing deals by its founder Chandra.

Zee-Sony merger

These developments coincide with the National Company Law Tribunal (NCLT) approving the merger of ZEEL with Culver Max Entertainment, earlier Sony Pictures Networks India, on August 10.

The merger is said to create a $10-billion media giant, with the combined entity owning over 70 TV channels, two video streaming services—Zee5 and SonyLiv—and two film studios— Zee Studios and Sony Pictures Films India.